tv Closing Bell CNBC March 21, 2019 3:00pm-5:00pm EDT
off the session highs and all about apple up 4%. got some upgrades, a price target jacked by a couple of firms out there ahead of the big event next week. >> go figure, yeah. >> great stuff, tyler. enjoy the food enjoy the ballet. >> "closing bell" starts right now. it is the final hour of trade. dow component nike about to report earnings. biogen losing $18 million in market value and levi strauss surges on the first day of trade. we have an exclusive interview with the president of the new york stock exchange. "closing bell" starts right now. ♪ welcome to "closing bell." i'm sara eisen along with wilfred frost. near session highs the dow up 200 points. apple is the winner adding about
50 points to the law and most components are higher including nike ahead of the earnings next hour as for the broader markets, strong again up more than a percent. the nasdaq's doing well. tech trade is on nasdaq only group lower, financials. >> a similar trend to what we saw after the fed yesterday. banks down, everything else. much more pronounced and near the session highs with just under an hour left of trade. we'll take a look at shares of pu curaleaf soaring on cvs to sell some of the cbd talks and we'll talk to the ceo coming up on "closing bell." let's begin with the two big ipo stories of the day bob pisani looking at he levi back in the public market and leslie picker with the latest on
lyft's ipo roadshow. bob? >> it started here $14 to $16 price is $17 opens at $22.22. that's a pop the timing was just absolutely perfect. plenty of pent-up demand because the market closed for four months strong start to the year for stocks reasonable valuation nice pop demand's been strong if you trade 100% of the volume on the first day, strong and hour to go at 110% of the volume don't expect this to happen with everybody else there's a ton of stuff out there. 234 point ipos $700 billion valuation they could seek to raise up to $100 billion that's a record. who's going to buy all of this stuff? will there be a revolt when they put the prices too high? waiting in the wings you know uber, weworks, airbnb
and bet they're looking to put the valuations even higher back to you. >> bob, thank you very much for that we'll talk more about that particular ipo with the new york stock exchange president stacey cunningham coming up turning now to the next big ipo, lyft leslie picker has the latest on thatting on roadshow leslie >> reporter: hey, wilf about 90 minutes ago the investor luncheon with lyft executives ended here at the saint regis. about 200 investors showed up today an i'm told the room was jam packed and the ceo and cfo all spoke and presented. media are not due in the room due to regulations however we caught up with about a dozen investors leaving the luncheon to get key insights of what went on in the room among one of the most discussed aspects of today's lunch was the
20% long-term target margin that the executives pointed to. when they reached those 20% margins remains to be seen but that was something that investors took away as a number that they could input in the models also, executives said that 2019 is going to be an investment year for lyft so investors in this ipo should expect in 2019 those costs aren't going to be going down and that investment will continue in 2020 but it will subside after that i heard from investors that said that the management team that spoke very personable. was one adjective used to describe them. i did given the sample size hear some high marks as it relates to management also very much in focus for investors today, the idea behind autonomous vehicles and the company strategy, technology, sophistication surrounding that and how that relates to margins
because as you know if you have an autonomous vehicle you don't need to pay the drivers and it would theoretically help their margins quite a spoke. we spoke with an analyst shawn kim saying lyft was the el fapt in the room meaning lots of chatter about this big competitor and no one mentioned uber by name either in questioning or the presentation, guys. >> leslie, i just wanted to ask you about an issue that ties together both levi's and lyft and the issue of the dual class instructor and not getting full voting power they didn't have much in levi's. looks like successful so far does that tell you anything about where investors actually stand on this issue and whether it's a factor in demand? >> reporter: it's a great question, sara we asked investors as they were leaving whether the dual class share structure is turning them off the deal, requiring them to put some sort of discount on the price that they'd be willing to pay for the ipo and most
investors said, no, kind of used to it at this point. so many tech companies are coming out with these dual class share structures, clearly didn't make a difference for levi's today and the pricing and trading after market trading and so investors here don't seem to think that's the main issue. for them, profitability is really front and center. >> leslie picker, thank you. let's get back to the broader markets on this rally day. investors had a full 24 hours to digest the fed decision. joining us is laurie from rbc markets and neil is this a delayed reaction to the fed? >> i don't know. if you look at how the markets reacted yesterday, i mean i would say that financial conditions which i think is what the fed cares about, not just the level of stock prices, financial conditions on net probably eased modestly yesterday. i mean, you saw -- >> more yields, weaker dollar.
>> some compression in the corporate bond spread. right? if you look at the high yield bond equity etf. picked up. you know 3 out of 4 ain't bad i don't think the fed was unhappy with the market response financial conditions are easing. that's obviously important to them and you know, my own view is that the dollar is likely to continue to weaken this year and i think that will over time bring the discussion about rate hikes back into the fore not yet but certainly something that the fed may be thinking about getting into 2020. >> are you feeling more bullish after the fed yesterday? >> i don't know that the fed really changed my thinking one way or the other i think there was a 24-hour period where they were a little bit more dovish than people expected and when you have a surprise i think it takes the market a little while to digest that but we hadn't been banking on a major tightening on the fed
in the second half of the year we thought with qt signaled to come to an end that's the big concern for markets at the beginning of the year and factoring into the thinking for a while. >> did it surprise you that they took the amount of rate hike projections to zero? seemed to come as a surprise to the market. >> i think what's more important is the way they think about the data if you raise the unemployment rate estimate by 20 basis points, if you think a tenth lower than where you thought previously and put it into a standard type of tailor rule what economists call, that would give you about 50 basis points of decline in the fed funds rate so to me i think what's important is that the fed is data dependent i don't think the way they respond has gotten more dovish i agree. but it's important i think for investors to know that those forecasts can change quickly, as well a lot of the things that the fed is looking at right now in my view, whether it's trade
tensions, brexit, the question to ask yourself, are these issues as salient three to four quarters from now as they are at this very moment i would argue probably not and that's one of the reasons why we're sort of negative on the dollar this year and again lower dollar, higher inflation brings a discussion of hikes back into the table. >> you're more positive on the smaller cap end of the spectrum. >> we're neutral there on a six to 12-month view but you have a cheap valuation discount and we think small caps took a hit because you saw u.s. economic surprises start to deteriorate and a cyclical part of the u.s. stock market if we claw our way out of the rough patch in the months ahead i think it gives small caps a nice bid. >> regional banks are a part of that do you include them in this? >> we do we like banks in big cap and small cap but i would argue the valuations look more interesting down in small cap and i think a
lot of people looking at the financials, looking at the banks saying rates don't go up how can we buy the banks now that's never really been part of the thesis on the banks. wi we think you have external catalysts to bid up the group. buybacks are another thing we're seeing the banks be engaged in, as well. >> we're heading into an earnings season of uncertainty what was fedex >> people throw around the chart showing change in the chart. to me, you know, all these relationships are sort of spurious look to me the most important thing for investors is the economy's expanding above trend. likely to see solid consumer spending we had a weak retail sales number in december consumer sentiment bounced back strongly consumers wouldn't be confident if they were spending so little as december and with employment continuing to expand and interest rate comesing down,
this represents i think a pretty meaningful tale into the housing market and considering that residential investment was a drag on growth, every quarter of 2018, i think the home builders, construction index is likely to rally this year. >> stick with us we have a news alert hey, scott. >> wilf, it's apropos to the conversation you're having investors downloading what happened yesterday and one taking stock is jeffrey gundlach and i asked him throughout did day whether he was surprised by this double down from the fed in a more dovish pivot an he told me, take a look at this, i think you have to be he said i predicted from two hikes this year to 0.5 and everyone told me there's no way to downgrade it that far
he says what the that one hike in 2020 thing about? it seems almost desperate. the fed has gone from we got this to we'll get back to you. not reassuring and then i went back a little bit later this afternoon and i said, do you still think we're in a bear market because he's talked about it recently he said yes. in 2007, the fed went from a bias to tighten to a e emergency ease in just a few weeks and the s&p celebrated with a push to essentially a double top over the ensuing several weeks. this pivot he said from december's hawkishness seems met fo forcall and he said oil is up substantially from the december meeting and going on to say why won't they give a reason for this it's actually factually correct. say trump demanded it or avoid ried of europe or asia but stop
with the gaslighting so that's coming straight from jeffly gundlach and trying to make sense of it just like the investors you're speaking with. >> i don't know why he seems so critical of the fed about, scott. is he critical that they raised interest rates in december it sounds a little sarcastic. >> i think -- oh, it's definitely snarky. i think that's part of the point and taking issue with the ability to see the future, if you will to make the predictions. and then have to pivot far away from the ones that they've already made and i think he's certainly calling into question some of what the fed claims that it is seeing whether it's oil prices which now maybe are a worry but they have been going up substantial wily i think he is throwing their methodology if you will out into the ether to say what
methodology could they possibly be using they've already shown their inability to make any sort of reasonable predictions on where the economy is today or where it's going to be in even the near future because of that pivot that you got in december and then the double down that you got yesterday. >> scott, thank you very much for that neil, to the point there that mr. gundlach made to scott, could this be like 2007? what are the chances of that >> i think pretty limited. i mean, you don't have the credit markets seizing up. we don't have funds blowing up in the summer like we did in 2007 at least not yet but i think the housing market is important the housing market was basically like 6% of gdp at that point and going down and, you know, right now it's, you know, arguably around 3%, 3.5% of gdp and going up and the labor markets in a much
healthier spot they were clearly slowing down you know, in terms of the fed, i mean, yes. i agree that bashing the fed is parlor sport among everyone on wall street. it's a fun thing to do that being said, i do think that there's a case to make that they made a mistake by hiking in december maybe that's one of the reasons why we are not talking about hikes for this year. that being said, it was a small policy mistake that's being walked back quite rapidly and they want inflation higher so seeing that in their summary of economic projections i think that's really the catalyst for a real shift in the fed's thinking when they basically leave the rates outlook unchanged and pencil in a higher inflation outlook, that's a dovish shift in the reaction function and probably a nice tail wind for asset markets. >> i think it was a mistake to say the runoff sheet is on autopilot. bottom line, what does it mean for the markets?
we have the fed trajectory pretty much baked for 2019 and getting earnings. >> right now i think the next reporting season is absolutely pivotal is the next batch of economic data that we get. i think investors will keep the markets going to be on a short leash from an economic perspective. we need to see signs of the rebound and signs that earnings growth expectations are stabilizing. what the fed does and i think we knew this before yesterday and i think multiples can expand a little bit from here the tightening fed is the thing to take the pe multiple down this year. i think we'll be able to hold on to the gains at the end of the year. >> thank you both very much for joining us. still ahead here on "closing bell," cannabis craze may be coming a drugstore near you as pot company curaleaf said the products will be available in cvs stores we'll speak exclusively with the ceo. the nyse reversing the long
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that's different songs with jeans. levi's strauss making the debut at the new york stock exchange here's video of the post of earlier today. the stock as we just said up 32%. opened at 22 bucks 22 and currently at 22.50 or so. the new york stock exchange president stacey cunningham joins us now in an exclusive sbr interview. good afternoon. >> thank you so excited to be here. >> we'll come to the changing rules and the jacket you're wearing in a moment but it's gone well this ipo we've had a sort of lull how pleased are you with how it's gone and will that trigger a wave of more ipo snz. >> we saw a slowdown in the market this year for a couple of reasons. there's the volatility at the
end of the year and then the government shutdown. we sow some companies being held up a little bit. i do think we'll catch up and be on pace to where we were on track for before and i think q2 is a busy ipo quarter. >> on track for what kind of number this year across all ipos, some people thought crossing 100 billion in 2019 is that still on the cards >> i would say there's large companies out there queued up and ready to go and if everything that is ready and waiting does actually come out to the market we could see big numbers. >> already talk of an ipo bubble because so many companies in the pipeline now getting ready do go public is there a concern that the more the flood gates open you'll get less quality ipo with less -- than a levi's of today >> we are seeing a concentration of companies ready with the slowdown in the first quarter and not unreasonable levels for us to see and i think that the companies are coming out now are
large companies with a -- really well established businesses and a lot of brand recognition and helpful, too. >> a lot of talk going on about dual share ownership structures. do you think that hurts pricing, demand or because there's so many companies out there setting the precedent like the facebook it doesn't matter anymore? >> i think today was a perfect example. levi's with a dual class stru structure and the user demand was up 30% and opened higher today and investors say they believe in the long-term strategy and important to give companies some flexibility in the way they come to the public markets. keep in mind there are alternatives we want to see companies coming public and not staying private and having the flexibility to reward the mechanisms to use is important. >> so do you not push companies on that point at all you're really very happy for them to come along and withhold voting rights of buying shares
through your exchange? >> i think it's important to recognize while we talk about dual class structures the vast amount of companies do not use a dual class voting or weighted voting rights. most going traditional with a share, one vote structures that said, i have a higher principle that investors should have the right to choose and investors should choose to invest in levi's and taking that right away from them by driving companies private that's where i get concerned. >> do you have any concerns of pi ipos. there's so much for etf and index funds. >> the early signs even given this environment is investors are eager to invest in the companies and levi's is a perfect example of that. >> you mentioned they have other options and the private market grown, the venture capital market, investing in lyft and uber and pinterest grown massively over the last decade
s. that a concern coming to list that they have grown a lot more than in the past how much they would have grown coming to the public less is on the table. >> timing is a downside for the every day investors. if companies haare having the fastest growth spurts and they're public we are not giving the every day investors access to the opportunities i think it contributes to the bifurcation of wealth in the nation if the most dynamic companies are private and we have created a structure where big companies and big investors have the most opportunities. that's a pendulum we need to see swing the other way but the public markets provide a lot of value and so we see companies recognizing that and wanting the currency, the discipline and governance of the public markets. they're all reasons why you see even big companies that don't need money like spotify was a great example of a company that didn't need to raise money and wanted to be public.
>> the next big one is lyft. how big of a loss was that for you going to the nasdaq? >> we focus on the companies coming here to new york stock exchange and support them and really excited of what's happening and levi's today and the pipeline. >> will you get uber >> you know i won't answer questions of specific companies. >> you missed out on one of them. >> i would say looking at the large companies that value the market model we saw today, all those traders out there that swapped out the trading jackets for denim jackets today, they make the market model unique they find the right price. our stocks open and trade with less volatility and 25 out of 25 of the u.s. company that is raised more than a billion dollars, 100% of them chose new york stock exchange. >> so many other big names on the list how do you make sure that the new york stock exchange has the big names and continues to have
the big -- even technology names? >> yeah. 74% of technology proceeds going back to 2014 have been raised on the new york stock exchange. we specialize in complex large deals. our market mod sell purpose built for it and how we go out there and talk about how can we support them as a public company and why they choose us. >> you mentioned the traders and including the president, yourself, sitting here changing your jacket today allowing denim on the floor which, of course -- >> jeans tomorrow? >> and on top of that, we have seen the likes of goldman sachs relax the dress code recently. we have to wear a jacket are you considering changing the rules long term to match the sort of changing cultures? >> today was a special day, a fun day. it was great do see the new york stock exchange trading floor dressed in denim head to toe i think we'll have to consider where we go from here. we have so many different people that come and gather at the nyse and the closing today is congressional medal of honor
recipients. >> we look forward to that, as well very deserving as they are final question on the broader markets. at or close to all-time highs and we have been getting up to the levels a number of times but the volatility index down below 14 do you get worried and say that it spells a big pullback, a sense of complacency in the market at the moment >> the way we set up the structure of the markets impacts how they trade and when volatility does increase, you see a lot more reaction in the market prices because trading is spread out a lot across the venues and why we lobby aggressively in d.c. for policy changes to support a market that can provide investor confidence and liquidity in all market conditions. >> based on the conversations you're having, this is a really good time to go public as bob mentioned. the market's been going straight up basically for 2019. do you see that window being open for a while >> i do. i do see that there's a lot of opportunity.
i'd still see the window being open and it is important to recognize a lot of companies coming public are mature companies and bigger it is easier to enter the markets when you're already an established company. the volatility doesn't impact you as much. >> thank you. >> thank you it's great to be here. >> thank you. >> you know? >> madame president, allowing us to be here every day. we have a news alert on boeing phil lebeau with the details phil >> sara, boeing slowing down work at the factory in washington building the 737 max and the 737 ng two thirds of the planes coming out are the max models and grounded boeing says it is taking three days what they call buffer days to do catch up production work they say this is because of the winter strom that slowed down production i think about 6 or 7 weeks ago in the seattle area because of that they say they're taking scheduled production days
putting them together at this time although, guys, you know that the skeptics look and say interesting timing given the fact that there are many questions of 737 production and whether or not boeing has to ultimately bring it down from 52 a month. we asked that question to boeing boeing says no change in the production schedule. the rate remains 52 a month. back to you. >> phil, thank you very much for that. still ahead here on "closing bell," apple leading the dow on the back of an alynast upgrade what's behind the move ahead no matter where you are in life or what your dreams entail, a cfp professional is trained, knowledgeable, and committed to financial planning in your best interest. find your certified financial planner™ professional at letsmakeaplan.org.
time now for a cnbc news update >> hello, everyone president trump says it is time for the u.s. to recognize israel's sovereignty the announcement signals a shift in u.s. policy and it comes as secretary of state mike pompeo is in jerusalem praising warm ties with israel and promising to step up pressure on iran. a shelter in place order has been lifted near the site of a chemical facility fire in deer park, texas. that order enacted after benzine levels detected. air quality levels taken since show the levels dropping. >> we have had one detection that was in the community of deer park. and it was not sustained it was around 2.5, 2.6, i believe. we do the air monitoring
we got the hit and then dissipated it is not continuous. cvs started to sell cbs products in eight states and partnered with makers for a line of tropical products with cannabis including creams, sprays, roll-ones and lotions. you are up to date that's the news update this hour i'll send it back downtown to you. >> sue, thank you. coming up, shares of nike up nearly 20% this year despite the shoe fail. see if that incident had any impact on results when nike reports after the bell. biogen plummeting after halting trials of a key alzheimer's drug we'll speak with an alt.anys and ask what he's recommending now. to unlock opportunities other advisers might not see. learn what a cfa charterholder can do for you,
paul, you downgraded this stock about a month ago on some pipeline concerns. did you see this coming? >> well, look. you know, recently when roesh's trial setting with a similar drug we were more cautious biogen drug tests the removal of beta to benefit alzheimer's patients and at stifel we have a love/hate relationship with this drug more recently the failures piling up and recommended investor gos to the sidelines. >> paul, you recommended hold, not sell having been buy. and clearly it's tanked today by 30% or so. so did you underestimate just how badly either the result could be or the stock price reaction to the result >> totally fair point. we didn't recommend investors short the stock by any means and felt like people needed exposure into the event and the end of
the day if the drug had worked the upside could have been really substantial we think the stock went over $500 and not that controversial of a view but downside here, 30%, to me that seems somewhat appropriate because going forward the growth drivers aren't clear and our model 2020 is now the peak revenue year for biogen and waiting to see about the contingency plan. >> does this have a ripple effect across the industry >> usually it does, sara i think it's positive. the street is spinning this one event as a -- as something that could actually bring more small and mid cap stocks into the fray from an m&a perspective. the xbi is up today. seeing several stocks in the green to the tune of 5% to 10% i believe on the thesis that, okay, biogen, big pipeline setback, paul mentioned that
2020 could be a peak year so what is biogen doing i think investors are saying it's obvious to start doing more m&a and sizable deals and smaller scale, but looking by the looks of the xbi and the other small and mid cap bio tech stocks the ripple effect is positive >> jared, any ideas of the type of targets to go after >> i think -- i mean, my view which i think is very similar to many other investors is cnf stocks and gene therapy names really fit for biogen and really depends on timing and how much they're willing to spend i think the company mentioned 30 to 40 billion in capacity. that could be several deals. they announced night star a few weeks ago and you could see bio haven, acade yeah, sage. these are the names that investors have thrown out. gw pharma keeps on going around. so i think names of that ilk are
probably fairly accurate. >> so, paul, i mean, this was clearly viewedly t by the marke a transformation hit what happens to biogen stock >> so i think going forward, i mean, i think it probably trades sideways until as jared alluded to we understand what they do with the cash and i think to jared's point, you know, the street would love to see biogen invest in transformative science. i think the two companies i hear a lot are sage and sarepta what's more likely to buy something with upside potential and less risky and just in playing the guessing game i think bio haven, companies with more derisk assets are more likely to be in play here in my opinion and i think if biogen acts quickly, it could help the stock recover a bit. 300, 275, seem out of the question near term to me.
>> guys, thank you both very much jared and paul. >> thank you. >> thank you. still to come, shares of apple popping on an upgrade. why a firm is calling it a strong buy up 4% today. nike reports after the bell. the stock up nearly 20% this year trading at record high we'll be right back. (danny) let me get this straight. after a long day of hard work... ...you have to do more work? (vo) automatically sort your expenses and save over 40 hours a month. (danny) every day you're nearly fried to a crisp, professionally! (vo) you earned it, we're here to make sure you get it. quickbooks. backing you.
welcome back to "closing bell." let's check in on individual market movers. darden restaurants up after posting a beat the story there olive garden doing better according to the ceo products like olive garden chicken alfredo with more chicken was a key driver i spoke to the ceo of restaurant brands international, the company behind burger king, popeye's and tim horton's. here's his outlook on the u.s. consumer. >> we are excited about the opportunities for growth here in the u.s. we think there's growth both in terms of same store sales, comparable sales like for likes are growing and also think there's opportunities
for growth in new store development and creating jobs, creating opportunities in small markets in the u.s. so we're really, really excited about the tuptd for bk, popeye's and tim's here in the u.s. >> highlighted it because it's sort of paired with the darden results in a bullish forecast for his own restaurant whether it's chicken or burger king burgers. >> healthy for darden up 7% today. i have gone for apple after an upgrade to strong buy from buy kritding value upside in apple's ecosystem. interesting move scale of the move i think because this is the key line the best valuation question for apple is whether apple is a product company or ecosystem company. the answer drives nearly opposite execution systems and valuation metrics and very much saying they see it as an ecosystem company. it allowed a bold buy call an
not drastically new information. people like it of course, good timing coming up ahead of their product announcement which is very ecosystem related on monday when they announce the content decision the analyst on "squawk alley" earlier and explained how that plays into the move. >> the most important is churn because the lower the churn the higher the lifetime value per user and on monday we think they're going to announce two services that will lower churn and that will add to the value overall of the ecosystem at apple. >> nice little bounceback in general. apple up 4% today. >> almost 40% from the lows. it was clobbered last year a dire sales warning of china. rebound has been pretty sharp. >> we'll talk more about the announcement or what to expect from the announcement on monday coming up in the show.
fascinating there. monday or tuesday? next week. >> next week. up next, a top strategist tells us what he thinks is paralyzing sentiment. curaleaf striking a deal with cvs useir ceo will join exclusively coming up. you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad.
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11 minutes left in today's session. as you can see, we are up 226 on the dow. the high 260 nothing to complain about. up 1.5% on the nasdaq. joining us, rick, i'll start with you, briefly dipped below 2.5% on the 10-year earlier back above that level now do you think the fall in yields is done for now? >> you know, i don't, personally i think there's a way to alleviate some of the pressure of the buying pushing rates down and i think that would be the equity markets there's very little doubt in my mind that as the equity markets continue to firm, as they continue to make new highs, they really pulled up rates but the problem is they pulled up rates basically to unchanged.
here we sit with a powerful rally in stocks. surprising rally to me, i have to admit, i thought there's much more nervousness of the soft interest rate complex and mean for equity investors down the road but i'm impressed and i think we have to continue to monitor. as a matter of fact, the dollar index is also very counter intuitive. just roaring today as a matter of fact, it is roaring against the euro, the pound, the major currencies. wiped out the pound's gains for the month, wilf. there's reasons it rallied and doubt as to why it fell yesterday. finally, very quickly, we had a philly fed survey today and special questions of the labor market shortages in '19 versus '18. 74% said yes versus 64 tightening labor market. about 35% from 2018. i guess the long and the short of it is i would suspect that wages remain high and nobody's
considering inflation and not the bond market, we need to suck up some of the pressures with productivity. >> rick, we're going to pause and take in the applause because today's bell ringer is just joining us on the floor here staff sergeant ronald shurer, the medal of honor winner, of alaska, was a senior medical sergeant and a special forces in 2008 when the team encountered machine gun and sniper fire and he was recognized helping to save many lives and given that medal of honor award and very much deserved and the bell ringer today which is eight minutes away. >> nice rally here into the close. is this a post fed reaction? >> yeah. the market can go two ways here. if you listen to jerome powell in december, it was we'll go a couple more times in 2019 and probably finish our balance sheet reduction in 2020 and that
was yesterday and what you have is we're done for 2019 as long as growth stays at about trend and inflation at about the target of two, we are done so now you can go ways i'm glad rick brought that up. you can go financial conditions are really easy and for a decade but the market up by a significant amount with easy financial conditions or the other way. if the curve yield keeps flattening we have about ten basis points of -- >> worry about recession. >> that sends a signal and sentiment to why is the fed -- >> yesterday it wasn't so clear. >> yesterday was a little bit of a give and a take and i think a lot of it the fed's version of the march madness which was changing the dot forecast. >> phil, you are adding risk to the portfolio by vm than domestic stocks? >> yeah. em is not the story it was for
us last year the world was growing. this year it's financial conditions are easing and if china's stimulating and the fed is not moving that's a better story for em all rates and dollar have to do is behave and em creates a tailwind and not the fundamental growth story. >> next week another face to face, very high level meeting between the u.s. and china on trade talks in china after the president said he doesn't want to take tariffs off even with a trade deal where's the market now in terms of how much expectations are priced in for a deal >> yeah. since that december 1st timeout, right? 90-daytimeout, em has about double the performance of the s&p. right? so what's priced in now is not just no new tariffs but the -- we would have to walk back and repeal some of those tariffs over time. we never thought the case would be we got a trade deal and everything from last year is repealed but if china plays by
the rules over quarters, over months then you get the pullback of trade but the story right now for em, yes, trade is better but the story is more fed pausing, dollar behaving. dollar doesn't have to weaken and can't rally from here. >> thank you very much. we have five minutes left of trade. we'll be bk acwith the closing countdown. when you retire will you or will you just be you, without the constraints of a full time job? you can grow your retirement savings with pacific life and create the future that's most meaningful to you. which means you can retire, without retiring from life. having the flexibility to retire on your terms. that's the power of pacific. ask your financial professional about pacific life today.
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welcome back to the "closing bell." it was a soft close yesterday and a soft open. you can see a speck of red at the start of the open on the s&p 500 intraday chart there good strong rally in the day plateauing for the final hour and up over 1% for the s&p the indices for you, dow just shy of a percentage gain tech's having a great day. apple up 1.5% and plays without the sectors, as well tech at the top. also interesting real estate having a very strong day up 1.7. consumer discretionary and staples up more than 1%. only financials are lower. that continues a theme from yesterday after the fed. continuation of what happened yesterday in a much more
pronounced fashion today bringing in bob pisani a reversal of the trend today. bob? >> a little bit of trendless a great day for levi strauss i 3o market is officially open i have been asked a lot about apple today. 4% move. what's going on? very simple. after the open, 190.65 200-day moving average the minute we moved that market lifted the whole apple just blew up on terms of the volume size so i think that was important. >> is that also the note talking about ecosystems >> well, there was -- i'm sure that was a factor but the volume moved up dramatically. technicals mattered. it is up march 8th, bank of america upgrade and the stock up since may we got the big upgrade of bank of america elsewhere again, banks your ballwick.
tough to make money in a regional bank when you don't have big loan growth and no interest rates moving up. >> thank you very much there's the bell at the close up over 1% for the s&p. well over 1% for the russell and the dow. nasdaq just shy of that level. but a very strong session. positive momentum almost right up to the close. sara, back to you. welcome to "closing bell." i'm sara eisen wilfred frost rejoining me in a moment with mike santoli, cnbc senior markets commentator take a look at the day on wall street very strong session. technology in the lead the dow closing up by about 218 points apple a part of that story along with the tech outperformance in general. that led the s&p but you have most groups in the green real estate, consumer staples
leading. financial's the only group to close lower. nasdaq come positive it up 1.4%. russell up 1.25% tracking for a very strong week overall. we got 2% move so far in the nasdaq heading into a friday coming up, curaleaf ceo joe lusardi here with the deal to sell cbd products at cvs stores. chip stocks soaring after strong earnings. levi shares skyrocketing and the imf say it supports the fed's decision to halt interest rate hikes. joining us to talk about the market is stephanie link, contributor and portfolio manager. welcome back nice to see you. so, mike, you said don't always trust the first reaction to the fed. >> right. >> everyone's wondering where's the celebration? the market got what it wants no rate hikes in 2019.
today we got it. >> there's a staticky reaction and today was bond yields quit going down before the market opened and a little bit of concern of treasuries going to keep rallying, a curve getting compressed more and in a deflationary scare and then released higher and stocks resumed what they have been doing for a while now. right? i mean, it looked like it was up, up and away and a continuation of the year to date move it is looking a little stretched. big nasdaq stocks, they really grabbed for them today and the big growth trade looks vertical right now and a lot of it, you know, obviously probably could stand to cool off but in general i do think low yields, slow but still positive growth and consumer in decent shape is the formula that the market can feed off of, especially when a lot of big investors have not fully participated. >> mike, it is not as simple to say that the fed move reignites the growth stocks.
>> no. >> you had staples and discretionary at the top and real estate with tech. >> yield plays plus growth stocks so if you reprice the market for a lower range of bond yields and a scarcity story again, big parts of it semiconductors were ripping today. that's not about yields. not about boring old stable growth stocks. >> stephanie, your take in general on this momentum today >> always takes a few days to digest the fed for me, as well. right? yesterday we got the news and what do they know? do they know something we don't know it was more of a worried point and then digest it and say wait a minute global growth is slowing has been over a year the growth is slowing. it has been for the last several quarters and okay, maybe they should take a wait and see and be data dependent. pce lowered the targets.
we all took a breath, a sigh of relief digest it and then to mike's point lower yields is very good for risk assets and so you are absolutely seeing a much -- >> what point is it worrisome about a recession or deflation because when you get super low and get the yield curve inverting then it raises other questions. >> right, no it is not a good sign and you have 12 to 18 months after the initial inversion to see a recession. we are far from a recession and we are slowing we have talked about it. right? we are not going back to the 4% quarter of last year but 2%. 2% is quite good with low interest rates and that's a good enough for earnings and i think the first quarter earnings - >> nearly 10% after beating on earnings estimates yesterday gave the broader chip stock sector a boost as they predict a
jump a best day since january up 9% the broader semiconductor etf up 3.5% s. this sector specific economy specific >> it's obviously a combination of all those things. risk ap sit gauge. certainly the sector also micron as a laggard in the group. an area under more pressure. it has sometimes traded as a china trade story, as well which i don't think is really front burnered right now and coming together. the market wants the try to call the fact that the semiconductor sector back on track that's the way the stocks are acting. >> that are. 11% for nvidia over the last week some of the -- amds, winners before are getting a bigger boost. how do you pick your spots >> i think micron all about very, very low expectation and cut cap x by 5%. they cut capacity by 5 pfrs.
that's a good sign, actually so they're trying to shore up that inventory and shore up the market and i think the quarter, main quarter guidance, could be the bottom and that's what people think and the main quarter guidance not worse than what people expected and when you have a stock trading at 10, 11 times earnings you don't need to put that much up initially >> do you like those >> i own lam research a lot. we have had a tough time in terms of our earnings season for the semis and they delivered and announced a new buyback program, as well. we were anticipating a second half of the year to see a recovery a darling is xylinx. that's a moon shot i'm not chasing it up here.
>> every single stock in that group went up. apple also helped the nasdaq pretty broad. >> tech is pretty much microsoft and hardware now because, you know, we took the social media stocks out, the communications ones and ap ple is a tremendous weighting in there and upgrade after upgrade and kind of got the short term momentum. to me that was lifting all of hardware. >> gaming stocks also exploded higher after google's news an the stocks seen a resurgence, as well. >> talk about shooting higher, levi strauss surging on ipo day up 31% remember, it had priced at $17 a share. opening trade was $22.22 that's a nice 32% almost pop in to the close are you a buyer, stephanie >> we participated in the deal that's for sure. didn't get nearly what we wanted but i think that the story, even though it had a nice run, i
don't know if i chase it up 30% but if you see a little bit of a stabilization or a pullback, it is trading at 17 times forward estimates. the jeans business is growing 3.5% for the last 10 years and they have opportunity to gain market share, continued, in men's and also in women's and in tops so there is a story, a top line story if you will, a revenue story along with a margin improvement and you can see the operating leverage is there. >> lyft is a totally different company but does the success of this deal help the prospects of that deal? >> it doesn't hurt it shows that the growth stock portfolio manager looking for new ideas. levi's a bigger brand an company and i think the market wants big american brands to travel the globe and talking about nike latter all-time high. starbucks, pretty much an all-time high and fits in that mold than the technology like lif lyft.
>> imf supporting the fed's decision joining us now to discuss, chief economist at goldman sachs thanks very much for joining us. >> nice to be here. >> originally you guys had four hikes in for this year what did you misjudge? what changed since now zero hikes forecast by the fed? >> i think the main thing is sharpening in financial conditions and took away the rationale for the fed to move. in the fourth quarter and that created a lengthy pause, now i think they've also said, the data have deteriorated pretty sharply. look at the headline numbers payroll 20,000 big retail sales decline probably a very weak first quarter for gdp. 0.4% and so they have moved more decisively to the sidelines. i think that makes sense in this sort of environment. i also think, though, that
actually the underlying economy is not looking that bad. i think the slowdown has been exaggerated by some special factors, some one off things you know the moves in financial conditions which have partially reversed, government shutdown. inventory. if you look at the data underneath the surface we actually starting to see stabilization so i don't think the growth outlook's that bad but makes sense from the fed's perspective to move to the sideline and see what happens. >> so you're in the camp then that says that the next move from the fed will be a hike, not a cut. identity just might take a while? >> yeah. i mean, we are fairly sanguine on the risk of recession we don't think that the economy is showing any recessionary signs. we are not seeing a -- we don't have the sort of imbalances that
caused recessions in the past significant overheating of either the real economy or the financial markets. so i think we'll get back to an above trend growth pace and in that environment i think you probably still see, you know, some monetary tightening we're currently in the first quarter of 2020. so you know, that's a while away of course it has to be confirmed by the data getting better or otherwise it doesn't happen and need to see stronger growth and you need to see some increase in inflation and i think there's a reasonable chance that happens. >> the way the fed communicated the perspective on inflation changed the equation at all of seeming to be willing to let it rise a bit >> at the margin we'll see what happens with this review of the framework. i think still early stage. but it's reasonable to expect some further moves in that direction. if they have already become a lot clearer in the recent year that is it's a symmetric 2%
target and if you were to see 2.2%, 2.3%, 2.4% inflation that's not a reason to panic same time i think if inflation is above the long-term target and the economy's making headway and the unemployment rate actually makes new lows later in the year that's our call we think the fed's too pessimistic on the unemployment rate and then support the idea for a hike but this is a pretty long time away and it's going to be determined by the data. >> the statement cited two main reasons for the continuing pivoting to dovish starting in december or early this year. one is international growth outlook. the other is financial conditions tightening. that kind of sounded more reasonable a few months ago than now. do you feel like if they continue to ease they could change course again fairly quickly or not >> i don't think it's quick. i mean, but i do think that financial conditions having reversed, you know, well more
than half of the damage that was done between september and the end of december i think that is relevant and it's relevant for the economy, relevant for what ultimately the fed does. the other thing i'd say is on the international data, we're seeing some similar things outside the u.s. as in the u.s quite a lot of weakness in q4 and q1 and some signs of bottoming so we calculate a current activity indicator with the high frequency number that is we get on a monthly and weekly basis and started to move up a little bit in the u.s., in china, and some degree even in the euro area. >> saying q1 was a bottom for u.s. an global slowdown? >> that's our view, yes. >> how much of that depends on the u.s. and china being able to actually come through with a trade deal >> we do assume that there will be a trade deal. i think if there wasn't a trade deal it would be more of a risk i think from a headline and maybe markets perspective so
financial conditions do matter in our framework so if there's no deal major falling out and there's a renewed downturn in risk asset prices, yeah, there would be a certain amount of risk but, you know, i do think looking at the underlying numbers things appear to be getting better and good fundamental reasons for it the chinese eased policy so it's not just confined to the u.s but it will be an interesting year. >> yeah. thank you very much for joining us good to see you. our thanks to stephanie link good to see you. nike set to report earnings any minute from now. we'll break down the results to see whether the stock's big rally can continue you.
that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. nike earnings are out. let's get to sara. >> all right looks like a beat here nike reporting at 68 crepts a share. estimate about 65 cents a share. sales also coming in better than expected pretty much in line with expectations 9.61 it represents 7% sales growth
for nike always critical to break down the geographies because nike is such a global company. north american revenue growing 8% double digits continue in europe and in china which is a particular point of growth 26% growth there and importantly nike's gross margins continue to expand 45% marking an increase from the 43 rs margins before looks like a strong quarter. shares are down a little bit after hours. keep in mind, this is a stock at a record high. it's rebounded 20% so far this year more than 30% off the lows and great expectations going into the numbers. here to talk more about them is sam poser, an analyst covering footwear and apparel at ses qua hannah what did i miss? >> gross margins were really good we get more details in the quarter. they seem to be overcoming any currency headwinds which are
certainly there and all -- everybody we're talking to as far as the retailers out there and their customers are telling us how strong the business is. and, you know, there's always timing around this time of year for timing of deliveries and so on but this sounds like it's all about like the air max and running silhouettes, speed initiatives, especially on the apparel side just seems to be very strong and with that kind of maintain growth in china and europe and a lot of talk in europe about potential weakness i think that's very positive. >> shares down 3% after hours. you think that's just about expectations going in? >> i think expectations going in and, you know, i think people realize how good the business is and when they do that, you know, after they start speaking on the call my guess is people continue to feel good. >> looking for the negatives, administrative expenses up 12% is that more than people
expected >> i think that on the -- you knew that if they were going to do well on the gross margin they continue to spend to keep building their business. that's something that's not really surprising. i didn't see what the percent was but i think that that gross margin number was really the key and maybe north america up 8% was a little under what people were thinking but i think that's because people just sort of depressed -- >> pushing the stock almost every day to the upside what is the category doing in other words, is there a tailwind from what the category sales are or a market share story entirely >> there's a -- it's all about new innovation and that's product and how you come to market with the product and so on so i think that's the story hearing about adidas i think adidas problems are their own and not caused by nike and once it's happening is
taking advantage of that and, you know, in the more moderate channel, they really miss that a year ago we hear a lot of new product, air max product, $75 to $100 for them, that channel, just coming in strong across the board and as i said the speed initiatives especially on the apparel side from what i understand are just killing it as far as the nike sportswear and their fleece. >> i predict on the call to hear a lot about two things we're going to hear about digital transformation, that's a favorite topic lately and the other is, of course, on the direct to consumer portion of the business how much is nike done on both of the fronts and how can investors see the results? >> i think the direct to consumer, a lot of i would say noise around that. they have said that they were going to get $7.5 billion by 2022 or '23 but in the five-year
plan and that's what their own direct business is and also working with their wholesale customers if it's foot locker or bigger, smaller people to figure out how to partner up with them on their direct business to have it be a much bigger influence overall so i think i'd pay close attention to the differences. >> are you still at a buy even though the price has run up so far? >> yes i think there's more there there. >> what multiple is nike at compared to competitors. >> you have one of the best companies out there that really from all of our checks is just at the beginning of these new initiatives and i think that's the key. i think people don't really realize sort of how they abouted up to a year ago and then the change that's happened and still very close to the beginning.
>> sam, thank you for joining us. >> thank you very much. >> jumping on straight after the numbers. a news alert on game stop. hey, josh. >> so game stop is now naming george sherman as the company's chief executive officer effective april 15th he will succeed shane kim who's served as interim ceo since may 2018 the game stop's executive chairman noting the retail leadership at advance autoparts, target and home depot saying he's a right choice to calling this a critical juncture in the evolution of game stop and earlier this year the board ends pursue of selling the company. guys, back to you. >> josh, excuse me, josh, thank you very much for that. the fed turning very dovish on the outlook for interest rates. up next, find out whether history says that could help fuel the market rally further. slowing denim sales didn't
slowdown mike santoli looking at that at the telestrator today. mike >> history class right now. >> love that. >> a piece looking at the past instances, a lot of strategists pointing to earlier market periods that maybe resemble today. this is very alarming chart, 1987 and '88 and the general rule is people looking at previous periods of a bad market shock, the fed tightening and quickly turned to an easing mode and no recession took hold obviously this is the crash of 1987 the market weakening from summer of that year on. fed starts to ease there's no negative shock and then grind higher. in fact, through 1990 everyone said we're due to a recession and happening back then and didn't happen until a brief one in 1990. next chart is not the stock market but the yield curve and this is 1994-'95
look at how -- fed tightening 3 percentage points in 1994 and look at this this is the yield curve straight down and dead flat by the beginning of 1995. severe slowdown. the first half of '95 u.s. gdp under 1% at first report and a real recession scare fed went patient on hold. right around the middle of the year, eased. turned and cut rates and by the way the stock market through this period, 1995, up 38% with almost no pullback so i'm not saying we are going this direction necessarily but we have been here before. >> your column explores other years. 2000, 2016, 2009 either way, the bottom line is that there's some -- quite a few examples of where it could be positive for the equity market. >> many ways and seeing people cite the examples to sort of a
grounding of a bullish outlook and the fed always tries to execute a soft landing and not always successful and one of the bigger takeaway here. >> mike, as always, thank you very much. time now for a cnbc news update with sue herera. >> everyone, a ferry overloaded with people capsized in the tigris river killing at least 83 people many of the dead were women and children the death toll is expected to rise. new zealand prime minister ardern following new gun laws saying that the administration is banning assault rifles, high capacity magazines and military style semiautomatic rifles. >> these changes will require legislation. my expectation is that the law will be in place by the end of the next two-week sitting session which is by the 11th of april. "the wall street journal report"ing colin kaepernick and
eric reid to receive less than $10 million to settle grievances and far less than the tens of millions of dollars that kaepernick likely owed if the grievance prevailed. that is the news update this hour i'll send it back the you. >> thank you. up next, cannabis is heading to a local drugstore curaleaf ceo joe lusardi joins us in a moment. are the tariffs giving the u.s. whiskey economy a hangover? plunging export numbers coming up measure up? a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise
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eight states, the topical products only. >> branded by cvs? >> not branded by cvs. jim, you know, we have heard from the customers that have used those products that, gee, helped with pain relief for arthritis and other ailments so, you know, we are going to walk slowly but we think that this is something that customers are going to be looking for and part of the health offering. >> we are now joined in a cnbc exclusive by joseph lusardi, the curaleaf ceo welcome. >> thank you for having me. >> tell us about the deal. >> we are excited about the company in general it is important to note that we are the biggest and most accessible cannabis company in the united states, operate more retail stores under one brand than anybody in the country and we have the most capacity in the country and a leader in the cannabis industry and all those factors contributed to the ability to have gains in the cbd
products. >> did that get you in front of cvs? >> we service almost 50,000 unique patients a month and synonymous with trust, quality and reliability. >> people don't know about you because you're not a canadian company and don't trade in the u.s. you trade sort of over the counter in canada. how does that work >> it is not quite over the counter. we are a u.s. operator so we operate in 13 states we are in fact the biggest operational footprint and trade in canada at the moment. >> is your cvs deal exclusive? might you roll out to others >> we are in conversations with many national retailers. let me frame the opportunity for you. estimates of cbd to grow from $600 million this year to $22 billion in 3 years so i can assure you every national retailer in the country is trying to figure out this space and we are having an active dialogue with many of the
retailers right now. >> the size of the opportunity is clear obviously what has investors and customers excited about the industry but what i always like to ask is, what is proprietary or branded or exclusive? in other words, in this larger world with a gold rush mentality, it is the properties of the plant that are being sold and what do you bring to it? >> yeah. i's our ability to form late, create products that are responsive to people's needs we are the biggest medical operator in the country. we service 50,000 unique patients and carry over 250 skus all type over products and formulations and tremendous amount of credibility in the space and proud of that heritage and into the cbd market. >> what sort of challenges does it present being an american company being in cannabis with a federal law that makes it illegal in this country? >> yeah. what i'd like to say is there's a conflict that has to be resolved 33 states have medical marijuana
laws and curaleaf will be a beneficiary of those changes but we trade in canada we are not allowed the trade on the new york stock exchange and we need federal legislation to change that. we are literally ceding this industry to the canadians right now. >> mentioning the conversations having with all sorts of other retailers, any that push back either because there's no federal law yet or because they're still concerned about the long-term health concerns? >> leader mcconnell descheduled hemp and many will carry the products because americans want them 60% of americans support adult use and the products will be sold because the consumers and the americans want them. >> what is your best selling product? >> you know, right now it's formulated vaporizer products and carry them in strains and formulations and they are the
most effective for a variety of medical conditions. >> what will we see at cvs >> our hemp-based cbd topicals. >> do you use those products or any of your products >> i do. i think cbd is effective people use it for a lot of reasons and clear that in the data that consumers continue to embrace the products. >> topicals like for skin care >> exactly yep. >> all right joe, thank you very much for joining us. >> thank you for having me. on the rocks that's where whiskey sales appear to be headed as the trade war wages on and target it is industry. the jeans ban was lifted here today but with the decline of business sus ght anitmijes become the office norm? we will have that story. you're searching for something more... ...red-blooded. right this way. you thirst for adrenaline, you hunger for raw power.
welcome back here are some of the other stories on the "closing bell" radar today. i obviously chose whiskey sales in the u.s turns out they're slumping in the trade war may be partially to blame according to a new report, u.s. whiskey exports dropped 11% in the second half of 2018. this after canada, china, mexico and the eu slapped retaliatory tariffs on the u.s. on whiskey in particular last year in response to u.s. tariffs on steel and aluminum and trying to be politically motivated to get at some of the key swing states that some of trump country like kentucky, for instance, and the
bourbon and obviously it had an impact on the exports. >> first half of 2018, up 33%. second half, down 14%. >> i was going to say -- it was a boon. >> stockpiling and then crashed. huge impact on that particular commodity. comcast is trying to woo the cord cutters, parent company, with a brand new streaming platform of xfinity flex the service will cost $5 for existing internet consumers and stream netflix and amazon prime and beating apple to the jump and expected to announce on their own on monday. feels like comcast rushes out ahead of that event. maybe they didn't. ten years ago apple had a big opportunity to own this space and by that i don't just mean the software but the hardware for it, as well. >> yeah. >> if they nail it on monday
with their announcement to drive more con surms, then great but they can't own that hardware space and so many different options already and saying you can only get it on one particular hardware device - >> i think it underscores the fact of linked to the broadband service. right? the broadband service is the product here and everything else is an application on top ofit and seems to operate the way smart tvs do right now with the apps on the screen and obviously a skinny bundle impolice sy in there. >> how many streaming platforms, though how many to pay for at one time? >> hundreds of cable networks. >> i guess that's true. >> and knit them together like this right? bundle them again. speaking of apple, "the wall street journal" is planning to join in on apple's new paid subscription news service also expected to be announced on monday and the news app described as a netflix for news could introduce millions of new customers to "the wall street journal" publications like "the new york times" and "the
washington post" are chafing at the terms of the deal. apple to collect some 50% of any partner publication subscription revenue and higher than apps and every news organization traditional one realizes subscriptions are the way to go and the three newspapers are well on the front of that and i was at dow jones whether the "wall street journal" digit l launched and controversial as a paid subscription service. everybody said free, free, free. not like they go into this lightly. >> the company i can't believe hasn't done this is twitter because we all get our news from twitter and infuriating when someone retweets the uk times article, must read and don't have the pay wall. if there was an aggregator of the subscriptions and say make sure whoever gets the most clicks goes to the - >> maybe the negotiations of 50%? >> that's what they're
supposedly asking. i don't think anyone confirm third degree on the rodrigue. >> if that opens up people willing to pay some form of subscription for news to a totally new audience of people that - >> apple music it's installed on the phone. >> right it is worth it for them, i guess. >> the stock up about 4% despite the success of the levi's ipo some believe the future of denim might be in doubt. two leading fashion experts debate the fate. tonight, a top technician says two stock it is buy right now for a brkoeaut he'll give us those names. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills.
say in fashion one day you're in and the next day you're out. chip burg addressing the challenges of the market listen. >> back in 2014, 2013, 2014, the headlines were the death of denim and all about, you know, athletic types, lue lue lemon types. we understood what women were really telling us by wearing tights that used to be a denim occasion they wanted soft, stretchy, comfortable material to make them look great and confidence and that was what was driving that conversion. so we innovated around soft, stretchy, comfortable denim and we can now do. >> can denim survive the fashion cycle? a special guest mike santoli and wilfred frost? no vanessa friedman of "the new york times" and lilliana vazquez
of the lv guide. vanessa, that general trend all day, denim has surprised many over the last five years or so. >> the thing is denim ebbs and flows and never out. it is a baseline love of jeans n. this country but many other countries that i think they're riding clearly to a high. >> how crucial was that trend to the comfortable jean, the stretchy jean as it were >> so crucial. i think he nailed it it is women weren't asking for leggings not like every woman said i want leggings all day but comfort if you can reach them on comfort and you can reach them on price point, there was a big push of premium denim and levi's delivers at the midpoint to low point especially with the partnerships they have with target and walmart and they're going after a very different consumer and he's absolutely right. if you cater to what the customer is asking for, a legging or a jean or a jacket, the customer will follow.
>> i didn't know kanye wore denim to the met gala. >> ripped denim, very controversial. >> changed everything. >> does something like that change everything? >> you know, it means people talk about it but i think it goes to show it means people ta it, but it goes to show you you can now wear denim pretty much anywhere in life you can wear it to work, you can wear it to cocktails, you can wear it on the weekend and you can wear it to the met gala. >> except for the new york stock exchange. >> except for today. >> which i heard was very popular with all of the traders. >> we talked to a jean executive who said athleisure has peaked and denim is coming back why is it painted from one end to the other >> i think the truth is comfort is in. if you can provide comfort in whatever fabric, you're going to win as a brand. >> that's what i wonder about. i've thought athleisure peaked before it actually did peak. but is it comfort or is it what
it signifies which i just walked out of a yoga class and i can afford liulu lemon. >> i think it is about a lifestyle and presenting what that lifestyle means to you. >> he doesn't trust my fashion sense. that was in quotes two months ago sara let me choose her sister's wedding dress. >> i will say this as a style expert, i work with hundreds of women throughout the year and it does not matter what day it is, it doesn't matter what they do or if their mothers are professionals. the one thing they always want to shop for is dendenim. you have to be careful with denim. while it is so incredibly popular and it's not about a trend, this is an item that has low loyalty because there's always a new brand popping up on the spectrum it's an item that has very high
returns because it's all about fit. if you don't get that fit right, that item is coming right back to you especially when you talk about online shopping. you've seen an explosion in online shopping. the other thing is i think women shy away from committing to one style in their wardrobe. typically they say women own about seven pairs of jeans but there's no loyalty there for a brand. so i think you really have to work on that as a levi's or other brand to make sure you're capturing a loyal customer. >> vanessa, how is ripped denim going? it drives me mad that you buy something already ripped. >> rimmed, distressed, stone washed what's interesting now is that every denim trend is pretty much present at the same time, which is why you can have seven pairs or more of jeans in your wardrobe you can have flares, you can have boyfriend jeans, you can have skinny jeans, green and yellow. >> you can have see-through jeans. you remember when that happened? oh, god, i won't show you the photo.
>> vanessa, we're talking about jeans, but what about levi strauss in particular? because it's not like gap has been doing particularly well lately and they're a pretty big jean player. vf corp is spinning off its jean business how is levi doing versus the industry. >> it's clearly the leader what they have done that's been so successful is brand it as an american iconic symbol and tap into that strain of nationalism, patriotism, authenticity, which is a word that is endlessly thrown around and really make that his wheelhouse. >> no, i agree and it's a heritage brand. you're looking at the resurgence of all these heritage brands lee jeans, wrangler jeans all coming back because we're living in the '90s when it comes to fashion, wouldn't you agree, vanessa? all of these '90s jeans are making a comeback and levi's is leading the way. so one to watch. >> one other question investors
have is on the growth outside of denim pants, because tops are 20% actually of the revenues at levi strauss and they have done tremendous growth over the last five years is that something that's a fad, denim tops and jackets >> i think denim jackets will never go away. i personally own three of them just for spring. it's one of those things women feel really easy to wear i've walked in and seen ten women in a different denim jacket they do great logo ts, they'll be successful. >> but still it will be about bottoms in the end. >> bottoms rule. thank you. this is very useful. vanessa freedman and lil ana vasquez. pickup truck sales taking a turn, maybe on the rise. if you're thinking about buying one, stay tuned for the winners and losers of a crash test that's coming up w your wealth. make sure you're working with a wealth manager who can grow with you.
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revenue up 7%. that was a little shy of the whisper number china revenue is up 19%. overall a pretty healthy quarter. strong run-up in the stock. >> gamestop announcing a new ceo, george sherman. no real move in the stock price. uniform maker cintas falling on earnings. full year revenue guidance also coming in a little bit light estimates down 3%. we've got a new report from the insurance institute for highway safety it's raising a red flag about some pickup trucks phil lebeau has the details. >> wilf, this is an important crash test because so many people are now buying and driving and riding in pickup trucks this was measuring how effective these trucks are at protecting passengers when there is a collision with the right front of the pickup trucks let's give you the bad news or troubling news right off the top. of the 11 pickup trucks that
were tested in the full-size category, three of them standing out as struggling a little bit marginal were the chevy silverado 1500 as well as the gmc sierra the only model that got a poor rating, which is the lowest model possible, the toyota tundra it is an older design which may explain why it may not protect passengers as well toyota says we will study the results and work on improving the safety of our vehicles in terms of those trucks that did well, you've got the ford f-150, ram 1500, nissan titan at the top of the list. guys, back to you. >> phil, thank you very much for that mike, resoundingly positive day today. >> it was. a new 2019 high, up almost 14% we have six trading days left in the quarter. i think some people will say is it enough for now. honestly because the market has been running just a little bit hot. >> if you counter what we got from fedex and some of the other
global growth concerns, nike doesn't do anything to add to that negativity. it's pretty positive double-digit growth. >> underscoring the consumer strength and manufacturing maybe weakness. >> true. >> in the economy as a whole. >> thanks for watching today that does it for "closing bell." >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. tonight on "fast" check out shares of nike getting knocked down after its earnings report the company call kicking off right now. plus levi strauss wowing wall street as it makes its public debut that stock soaring more than 30%. we'll tell you what the jean dream means for the other unicorns waiting in the wings. the dow, s&p and nasdaq all up 10% as the 10-year yield hits its lowest level since january 2018 there is one group ost